Initial success of China's 'long march' toward rural revitalization

Editor's note: Wang Jianhui is the general manager of research and development at Capital Securities. The article reflects the author's opinions and not necessarily the views of CGTN. It has been translated from Chinese and edited for brevity and clarity.

As a nation where over 90 percent of its areas and close to 35 percent of its residents – down from 89 percent in the 1950s – live in the countryside, China has prioritized farmers' concerns and rural development. 

The historic decision to initiate reform in rural areas in the early 1980s was deliberate. Equally significant is the rural revitalization strategy proposed in 2018 following the nationwide poverty elimination campaign that began in 2012. 

The central government released a policy package outlining a roadmap that required establishing an institutional framework and policy system by 2020. 

By then, no farmers would live under the existing poverty line – an annual net income of 2,300 yuan ($323.9) per person – and rural productivity and agricultural supply would have substantially improved. Since then, remarkable changes and improvements have been observed.

At the institutional and policy level, there has been a clear inclination for social resources to flow into the rural areas. 

In 2022, the State Taxation Administration introduced 109 tax reduction or exemption measures to encourage investment in infrastructure, business, industrial development and regional economic innovation in the countryside. 

Qualified companies, especially small and medium-sized enterprises, could enjoy the "no tax for three years and half tax for three years" treatment. 

In 2018, fixed investment in the agricultural sector grew by an impressive 15.4 percent compared to the country's overall pace of 5.9 percent; the momentum continued with an even greater growth of 16.1 percent in 2022, while the national investment growth was 5.1 percent. 

The direct and indirect governmental support was further reflected in financial activities. Outstanding bank loans to rural areas increased by 75 percent from 2018 to the third quarter of 2023, 3 percentage points faster than the overall growth, reaching 46 trillion yuan. 

The share of the total edged up from 19.5 percent to 19.9 percent; 35.8 percent (vs 34.6 percent in 2018) of the rural loans went directly to farmers. Additionally, financial institutions provided 9.15 trillion yuan for rural households' production and operation within the framework of inclusive finance, an initiative that originated with the United Nations in 2005 and has increased by 81 percent since 2018.

From a macroeconomic perspective, the rural economy has considerably strengthened, becoming more efficient and sustainable. The primary sector accounted for 7.3 percent of the national gross domestic product (GDP) in 2022, up from 7.04 percent in 2018. 

The accumulated growth of per capita GDP, 18,854 yuan in 2022, reached 51 percent since 2018, accelerating from 32 percent during the 2013-2017 period. 

The popularized concept of energy-saving and environmental protection, along with government-funded technologies and equipment, has helped to lower power consumption and fertilizer usage by 29.3 and 10.2 percent, respectively.

Agriculture as a key industry to national safety and stability is becoming healthier and more resilient. 

The total power of agricultural machinery increased by 10.2 percent to 1.11 billion kilowatts. 

Effectively irrigated areas, recovered soil erosion lands, and the sown areas gained by 3.1 percent, 18.6 percent and 2.5 percent, respectively. Production of grains and beans reached 695.4 tonnes and 23.84 million tonnes, up by 5.7 and 24.2 percent, respectively, during the period; the output of grains has maintained growth for seven consecutive years. 

The achievements mentioned above have translated into poverty elimination and higher living standards. 

In 2012, there were 166 million rural residents living on an annual net income of 2,300 yuan or less per person; the number has been reduced to zero. 

Per capita disposable income reached 20,133 yuan in 2022 (up from 14,617 yuan in 2018), with salary, operational, transfer and asset-related income accounting for 42 percent, 34.6 percent, 20.9 percent and 2.5 percent, respectively. The per capita consumption expenditure was 16,632 yuan, up by 37 percent. 

The consumption sentiment, measured by the ratio of disposable income to expenditure, has remained at 82.6 percent. The rural Engel's coefficient, the ratio of food expenses among consumption expenditures was 32.98 percent versus 49.1 percent in 2000. A lower reading indicates less spending on food and more on other needs such as clothing, living and leisure, and thus indicating higher living standards. Those of developed nations range between 11 percent to 18 percent, according to the World Bank statistics.

The 2018 strategy targeted the basic modernization of agriculture and rural areas, and equal access to basic public services for both rural and urban residents by 2035. 

The final goal of rural revitalization is to be achieved by 2050. 

Until then, we still have a long way to go. So far, rural per capita GDP, disposable income and consumption expenditure are only equivalent to 22 percent, 41 percent and 55 percent of the urban levels. The rural Engel's coefficient is still 3.5 percentage points higher than that of the urban areas. The "long march" towards the 2050 goal, albeit successfully started with very encouraging trends, is still in the initial stages.

(Cover via CFP)